Marex sees world 2011/12 cocoa deficit of 94,000 T

Marex Spectron estimates world 2011/12 cocoa output will fall 94,000 tonnes short of grindings, a switch from its November estimate of a small global surplus, partly due to lower Ivory Coast output and a higher demand outlook, the commodities brokerage said in a report.

This compares with a record 2010/11 global surplus of 417,000 tonnes.

"Weather conditions during December and early January in Ivory Coast and Ghana were far more typical of a normal dry season and significantly less benign than the same period of last season, indicating that the mid crops will be close to trend and much lower than last year," Marex Spectron said in a report.

Marex estimated gross world 2011/12 production at 3.867 million tonnes, down from the November estimate of 3.937 million tonnes, and around 9 percent lower than the previous year.

Ivory Coast 2011/12 output was revised down to 1.335 million tonnes from the November estimate of 1.38 million tonnes. This compares with 1.688 million tonnes the previous year.

World 2011/12 grindings were pegged at 3.922 million tonnes, up from the November estimate of 3.866 million tonnes and over 3 percent higher on the year.

The International Cocoa Organization is due to publish its first 2011/12 supply and demand estimates later this month.

The brokerage noted the bearish impact the Ivory Coast's cocoa sector reform was expected to have on the futures market, following this week's launch of the new forward selling programme.

Ivory Coast's reform of its cocoa sector, vital for the country to obtain further debt relief, began in confusion on Tuesday as the regulator hailed the first two forward-sales auctions as a success while exporters said they had boycotted them.

"The commencement of marketing of the 2012/13 Ivory Coast crop will have a profound effect on the price dynamics of the cocoa market and is likely to lead to lower price volatility and lower prices," said the report.